February data started out with unchanged vehicle sales, a strongly positive ISM manufacturing index, and a Chicago PMI that declined from white hot to red hot. Consumer sentiment as measured by the U. of Michigan improved.
January data included a big decline in new home sales, and unchanged construction spending, but an improvement in residential construction.
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The dollar steadied some on Friday in N.Y., though overall remained near its lows of the week as fallout from tariffs weighed. The DXY bottomed at 89.89, the lowest seen since Tuesday. EUR-USD ranged between 1.2294 and 1.2332, as USD-JPY made its way from 15-month lows of 105.25 to a high of 105.68 before turning slightly lower again.
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The dollar came under pressure as the markets continued digest the Trump move on tariffs and yesterday's walk back of hawkishness by Fed Chairman Powell. The narrow trade-weighted USD index (DXY) was showing a 0.4% decline as of the early European PM session, bringing the cumulative loss from yesterday's peak to 1.1%.
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The dollar remained on a back foot following Trump's apparent hitting of the trade way button, although it remains to be seen how targeted his proposed tariffs on steel and aluminium will be. Fed policy expectations remains in the spotlight, too, with hawkish remarks from Fed member Dudley serving to offset the impact from Fed chairman Powell's testimony before the Senate yesterday, where he chose to walk back some of the hawkish notes he struck at his House testimony earlier in the week.
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OVERVIEW
The Euro is weaker as the central bank policy in the EU diverges with most other major central banks.
The Sterling falters ahead of Theresa May's speech on Friday.
Eyes are on FED Chair Powel who is testifying again this afternoon.
HIGHLIGHT
The US Dollar continued its surge stronger across currencies today after yesterday's positive tone from the new FED Chair Mr.
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The DXY lost some ground through the N.Y. session, after opening at better than one-month highs of 90.93. The greenback sold off through the morning as Wall Street rallied, though later bounced following the announcement of the imposition of tariffs on imported steel and aluminum, which saw stocks tumble severely.
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In part 1 of this post, I mentioned that the relationship between stock dividend yields and bond yields (in particular, the 2 year treasury yield) had reversed recently for the first time in nearly a decade. For 50 years, bond yields were higher than stock dividends.
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The dollar has remained underpinned versus most currencies, bolstering to the USD index (DXY) to a five-week high of 90.78 and pushing EUR-USD to a six-week low of 1.2179. AUD-USD has registered the biggest move in trade so far on the calendar day out of the currencies we track, showing a 0.4% decline, with the Australian dollar underperforming amid reports that Trump is set to announce a 25% tariff on U.S.
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The dollar has remained underpinned versus most currencies, bolstering to the USD index (DXY) to a five-week high of 90.74 and pushing EUR-USD to a six-week low of 1.2183. AUD-USD has registered the biggest move in trade so far on the calendar day out of the currencies we track, showing a 0.4% decline, with the Australian dollar underperforming amid reports that Trump is set to announce a 25% tariff on U.S.
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The dollar added to post-Powell gains in N.Y. on Wednesday, taking the DXY to 90.69, a better than one-month high. Treasury yields remained elevated despite a small GDP revision miss, and a softer Chicago PMI. Wall Street started higher, turned negative, then rallied once again.
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